Will I Have to Split My Inheritance If I Get Divorced?
Over the course of a marriage, a couple can acquire money, property, and other assets in a variety of ways. They earn wages. They buy a home. They invest their savings. And, one or both of them may receive an inheritance.
When contemplating getting divorced, many people wonder how the property they have built up over the course of their marriage will get divided. They often have particular concern about their individual inheritances. Understandably, they feel protective of property left to them by a relative or loved one, and do not want to split it with an ex-spouse.
So, let us answer the big question up-front: no, absent special circumstances, you will probably not have to split your inheritance with your ex-spouse if you get divorced. However, you may have to split certain revenues or other proceeds generated by that inheritance, and you may have to reimburse your ex-spouse for uncompensated labor and certain expenditures.
We dive into the details below.
Louisiana is a “Community Property” State. Here’s What That Means.
Every state has rules about what happens to property acquired during marriage in the event of a divorce. Louisiana is one of a handful of states that follows the rule of community property. In a nutshell, that means that most property acquired by either spouse during marriage belongs to each of them equally, and gets divided between them equally in the event of a divorce. Community property in a Louisiana marriage includes (among other categories):
- Wages earned by either spouse during the marriage
- Investment income
- Property purchased with either of the above
Married couples in Louisiana can decide not to treat these items as community property by entering into a valid written contract, such as a prenuptial agreement.
An Inheritance is Considered Separate Property in Louisiana.
Some specific types of property that spouses acquire during their marriage, however, does not constitute community property in Louisiana. Instead, Louisiana law treats them as separate property, owned by a spouse individually and not subject to equal division and distribution in a divorce. Separate property in Louisiana includes (among other categories):
- Property brought into the marriage by either spouse
- An inheritance received by a spouse individually
- Property acquired with separate property (e.g., a home purchased with inheritance money)
Separate property remains separate in Louisiana regardless of who or what pays for improvements to it, and no matter by whom the property is “managed, used, or enjoyed”.
Thus, under Louisiana law, you generally do not have an obligation to divide your inheritance equally with your ex-spouse in a divorce. This is the rule even if you and your spouse used and enjoyed your inheritance together during your marriage, and even if you spent your shared money improving it (for example, you jointly paid to renovate a second home you inherited).
“Fruits” of an Inheritance Are Generally Community Property.
Some inherited property produces income and other proceeds. Louisiana law refers to these revenues as the “fruits” of an inheritance. They might include, for example:
- Interest earned on inherited money
- Dividends paid on inherited stocks
- Rent from an inherited commercial or residential property
- Income from an inherited share of a family business
As a general rule, the fruits of separate property, such as an inheritance, are considered community property in Louisiana. As a result, even though you likely do not have to split your actual inheritance with your ex-spouse, you may have to share the interest, profits, or other proceeds that inheritance generated during your marriage.
If you do not want to split the proceeds of your inheritance with your ex-spouse, then you may have the option of reserving those revenues as separate property in a written declaration delivered to your spouse and, when required, filed in a public record. Speak with an experienced divorce attorney about your options in this regard.
Your Spouse May Have Rights to Reimbursement Related to Your Inheritance.
In some circumstances, the community property in a Louisiana marriage may also include the amount of any increase in the value of one spouse’s inheritance. This will happen if the increase in value results from the “uncompensated common labor or industry of the spouses”.
Similarly, if a married couple uses community property to improve or benefit one spouse’s inheritance, then in a divorce, the non-inheriting spouse has a right to reimbursement of one-half of the value of the community property used for that purpose.
By way of example, suppose a spouse inherits a run-down house from a deceased parent. Over the next several years, the married couple spends every weekend renovating the house as a do-it-yourself project. They spend money from their joint bank account on materials and equipment.
If the renovated house has increased in value at the time the couple divorces, then Louisiana law generally entitles the non-inheriting spouse to reimbursement of one-half of the increase in value attributable to their common labor. Regardless of any increase in the house’s value, the non-inheriting spouse also has a right to reimbursement of one-half of the money spent on materials and equipment.
Questions About Your Inheritance in Divorce? Attorney Betsy A. Fischer Can Help.
If you have read this far, then you probably realize that figuring out what constitutes inheritance-related property you do not have to split with your ex-spouse, and what constitutes community property that you probably have to share equally, can get complicated. Protecting your rights in your inheritance to the fullest extent possible may require the careful analysis and considered advice of an experienced Louisiana divorce attorney. The sooner you connect with that attorney, the broader your potential options.
For 27 years, Attorney Betsy A. Fischer has represented Greater New Orleans-area residents in divorce and community property division matters. Her detailed knowledge of Louisiana divorce and community property law protects her clients’ assets and ensures they get to keep what is rightfully theirs when their marriage ends. Contact her today online or call 504-780-8232 to explore how getting divorced may affect your inheritance.